What type of CPA should I hire for my RE LLC?

Question

Hey Yall, what type of CPA should I hire for my RE LLC? I need someone to help make sure Im writting off the right stuff, to make sure my LLC is set up correctly, and all the other legal stuff. If someone could help me out, i would greatly appreciate it!

Jonathan Hayek · Answer

Knowing deductions and depreciation vs. LLCs and asset protection vs. tax strategy are not necessarily the same person.

A typical CPA in any firm can do your taxes for you legally but will probably not save you the most amount of money on your taxes because this person is likely not an expert in real estate tax law. Similarly, this Joe or Jane CPA will probably not be the best tax strategist either because they don't know the fine details of real estate tax law. However, this person will probably be the cheapest - probably $1500 or less if things are relatively straight forward. All CPAs are not created equal. Do not assume your CPA knows all of the ins and outs of real estate tax law.

You can hire a CPA that is an expert in Real Estate tax law (like Keystone). They will save you massive amounts of money in taxes, because they know the finer details of tax law specific to real estate. They will also help you strategize when buying and selling short term vs. long term to minimize your tax liability. You will also pay significantly more for these services. Depending on your volume, it could be worth it.

LLC set ups (asset protection) is a bit of a different beast. A great CPA can give significant guidance in this area, but asset protection is not a CPA's specialty. For most investors, asset protection and setting up LLCs is not rocket science, so the advice a great CPA gives will probably work for you. If you are doing serious volume, you need to consult with an asset protection attorney who specializes in real estate. You will also pay a fair amount for this service, but if you have significant assets to protect, it's probably worth it.

Michael Plaks · Answer

@Quintin Green

It depends on what help you want and what you're willing to pay for.

Any decent accountant can "write off the right stuff" more or less, and some will do it cheaply. This is your McDonalds - not hungry and no damage to your wallet. But it's not real food.

The next step is to maximize your deductions and do it while following the complex rules specific to real estate. This would be an accountant specializing in real estate. More difficult to find and more expensive. (Insert your favorite gourmet burger joint for an analogy)

But the real value is not in recording things after they already happened but in planning things before they happen. Called tax planning, tax strategies, tax advisory and similar words. This is the elite group, the steakhouses if you will. You can find 20+ of us here on this forum if you're willing to approach it seriously and pay accordingly. Some are CPAs, some are EAs which is a similar license but on a Federal level.

Speaking of "legal stuff" - accountants cannot do that. This is for attorneys - another professional needed on your team. Good luck.

Jake Hottenrott · Answer

@Quintin Green - I'd recommend a CPA that specializes in real estate AND that you can communicate well with.  Someone who is willing and wanting to work through strategy with you and not just end of year compliance.  Best of luck getting going!

Sarah Dudley · Answer

I would recommend a CPA that specializes in real estate as the taxes for the industry are a little different than just any other business. The LLC set up would need to be done by a lawyer.

Basit Siddiqi · Answer

@Quintin GreenLLC set up and all the other legal stuff = talk to an attorney, preferable the same one who set up your LLC.Help making sure you are writing all the right stuff = talk to a CPA who specializes in Real Estate.

Bill Hampton · Answer

Quintin,

I recommend finding an accountant who specializes in real estate taxation over one that is local. Consider working with your CPA remotely to expand your options.

I would also recommend looking for a tax strategist who is willing to work with you throughout the year, not just when preparing your tax return. You want an accountant that can help you strategize and who is responsive when you want to know the tax consequences of the decisions you are making throughout the year.

Good luck and let me know if you have any questions.

Quintin Green · Answer

@Jake Hottenrott Great advice! Im just making a collection of adive i get from here so thank you so much!

Quintin Green · Answer

@Allison Hayek Wow, i never knew. Thank you so much for all the insight!

What type of CPA should I hire for my RE LLC?

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